NAIROBI: The Kenyan shilling hovered at three-year lows on Thursday, with traders expecting the central bank to intervene by selling dollars if the local currency slid further.
At 0811 GMT, commercial banks posted the shilling at 89.70/90 to the dollar, barely changed on Wednesday's close of 89.70/80, its weakest level since December 2011.
The shilling has weakened about 4 percent against the dollar this year. The central bank has previously sold dollars to protect the currency, and has regularly mopped up excess liquidity to support the shilling.
"Obviously there are jitters in that some people believe that the central bank may want to intervene if they see it sliding so quickly," Duncan Kinuthia, head of trading at Commercial Bank of Africa, said.
"We are now looking at 90 being a key support for the local currency and also one that could prompt the central bank to take action," Kinuthia added.
The central bank has in the past sold dollars to support the local currency when the shilling touched 89.50 levels.
The shilling came under pressure this week after attacks on police and army posts at the weekend along Kenya's Indian Ocean coastline. Previous attacks by militants in the region that is a major tourist hub have scared away visitors and prompted Western nations to issue travel advisories.
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